Monday, March 1, 2010

The Enduring Foolishness of the "Giveaway to the Health Insurance Industry" idea

"The insurers were playing a double game -- hoping reform would die, but negotiating to limit their downside risk if it did pass. They were most friendly to reform when it looked inevitable. Now that they have a chance to kill it, they're taking their best shot. That's not something you do to legislation that's designed to give you billions in profits."

Instituting an insurance mandate is a means of spreading risk and, at least theoretically, pushing premiums down in cost by doing so. Car insurance would almost certainly be higher if insurance companies had to consider the potential risk of motorists' accidents with uninsured drivers when setting premiums. Moreover, the added bill in the House to end the anti-trust exemption for the health insurance industry I think is more devastating for them - and rightfully so - than ending their ability to discriminate against those with chronic illness or refusal to provide insurance for health - the latter, of course, being their paradoxical means to profitability.